Correlation Between Cheng Shin and Feng Tay
Can any of the company-specific risk be diversified away by investing in both Cheng Shin and Feng Tay at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cheng Shin and Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Shin Rubber and Feng Tay Enterprises, you can compare the effects of market volatilities on Cheng Shin and Feng Tay and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cheng Shin with a short position of Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Shin and Feng Tay.
Diversification Opportunities for Cheng Shin and Feng Tay
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheng and Feng is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Shin Rubber and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises and Cheng Shin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cheng Shin Rubber are associated (or correlated) with Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of Cheng Shin i.e., Cheng Shin and Feng Tay go up and down completely randomly.
Pair Corralation between Cheng Shin and Feng Tay
Assuming the 90 days trading horizon Cheng Shin Rubber is expected to generate 1.09 times more return on investment than Feng Tay. However, Cheng Shin is 1.09 times more volatile than Feng Tay Enterprises. It trades about 0.03 of its potential returns per unit of risk. Feng Tay Enterprises is currently generating about 0.0 per unit of risk. If you would invest 5,010 in Cheng Shin Rubber on September 6, 2024 and sell it today you would earn a total of 170.00 from holding Cheng Shin Rubber or generate 3.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cheng Shin Rubber vs. Feng Tay Enterprises
Performance |
Timeline |
Cheng Shin Rubber |
Feng Tay Enterprises |
Cheng Shin and Feng Tay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cheng Shin and Feng Tay
The main advantage of trading using opposite Cheng Shin and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Shin position performs unexpectedly, Feng Tay can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Feng Tay will offset losses from the drop in Feng Tay's long position.Cheng Shin vs. Uni President Enterprises Corp | Cheng Shin vs. Formosa Chemicals Fibre | Cheng Shin vs. Asia Cement Corp | Cheng Shin vs. Pou Chen Corp |
Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
CEOs Directory Screen CEOs from public companies around the world |